Appeals, Nos. 81 and 82, March T., 1964, from orders of County Court of Allegheny County, Nos. A 395, A 396 of 1960, in cases of Don Allen Chevrolet Company v. School District of Pittsburgh and David A. Smith, Treasurer; and Same v. City of Pittsburgh and David A. Smith, Treasurer. Orders affirmed.
Regis C. Nairn, Assistant City Solicitor, with him Justin M. Johnson, Assistant School Solicitor, Niles Anderson, School Solicitor, and David W. Craig, City Solicitor, for appellants.
Howard I. Scott, with him Michael J. Boyle, and Kountz, Fry & Meyer, for appellee.
Before Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'brien and Roberts, JJ.
OPINION BY MR. JUSTICE EAGEN
The Don Allen Chevrolet Company of Pittsburgh filed its mercantile tax returns and paid its tax liability for 1959, based upon the amount of the gross volume of business for the entire year of 1958. The city and school district notified the taxpayer that it was liable for additional taxes in a substantial amount for the year involved because the computation formula employed was not in conformance with the taxing enactments. The protest of the taxpayer was overruled by the tax collector and the additional taxes claimed were paid under protest. On appeal, the County Court of Allegheny County sustained the taxpayer's position. The city and school district appealed here.
The issue arises out of the language used in Section 5(a)(b) of the city's mercantile tax ordinance and similar provisions in the school district tax law. Therein a different tax computation formula is required for persons who have been in business for the previous full license calendar year, as distinguished from persons who have "commenced" business less than one year prior to the year for which the tax is due. In the former case, the past year's gross volume of business is the basis of the tax liability for the current year. In the latter situation, the first month's business is annualized in fixing the liability. The appellant taxing
bodies contend that the present taxpayer "commenced" its business less than one year prior to 1959, and should have computed its tax for that year by annualizing the first month's business.
The factual history of the business involved may be summarized as follows:
In 1951, the Don Allen Chevrolet Company became a franchised General Motors retail dealer. Its place of business was located at 5315 Baum Boulevard, Pittsburgh, Pennsylvania. This business continued until late in 1958. On December 29, 1958, this business changed its corporate name to Edson Investment Company. On December 30, 1958, the parties in interest in the Edson Investment Company formed a new Pennsylvania corporation, under the name of Don Allen Chevrolet Company, the appellee herein. On December 31, 1958, the Edson Investment Company transferred all of its assets, including all of its books and records, General Motors dealer franchise, corporate name, accounts receivable, accounts payable, all of the physical inventory, including new and used motor vehicles, parts, equipment, desks, business machines and all items of personal property on the premises, together with all of the employment contracts to the newly formed Don Allen Chevrolet Company, and in return received 51% of the stock issued in the new corporation. The only asset not transferred by the Edson Investment Company was the building at 5315 Baum Boulevard, Pittsburgh. Edson then leased the building to the Don Allen Chevrolet Company.
The Don Allen Chevrolet Company continued the automobile business at the same location and in the same manner as its predecessor, utilizing the same ...